The Indian government creates the rules for how income taxes function. They gather taxes from individuals, families, companies, and groups. Every year, individuals must adhere to certain guidelines when they report their income and taxes using a document called an Income Tax Return (ITR).
What Is Personal Tax Return Filing?
An Income Tax Return (ITR) is a form where you tell the government how much money you made and how much tax you need to pay. If you paid too much tax during the year, the government gives you some money back, and that's called an income tax refund.
Types of Income Tax Return Forms:
Different people and entities use different forms when they report their income to the government. Here's a simple explanation of each type:
ITR-1: Individuals who earn less than Rs. 50 lakhs from their job or pension and have only one house can use this form.
ITR-2: People like NRIs, company directors, shareholders in private companies, or those with capital gains, foreign income, more than one house, or income over Rs. 50 lakhs should use this form.
ITR-3: Professionals or people running their businesses in India should use this form.
ITR-4: People who follow a special tax rule and have less than Rs. 2 crores of business income or less than Rs. 50 lakhs of professional income can be used in this form.
ITR-5: Partnership firms, LLPs (Limited Liability Partnerships), and groups of people need this form to report their income and tax calculations.
ITR-6: Companies registered in India use this form.
ITR-7: Entities like charities, political parties, research institutions, and colleges or universities that claim tax exemptions use this form.
Top Income Tax Deductions
Section 80C Deduction:
You can save on taxes by claiming a deduction of up to Rs.1.5 lakhs for money spent or saved on things like PF, PPF, LIC premium, National Savings Certificate, housing loan payments, tuition fees for your kids, and more.
Section 80D Deduction:
This deduction is for payments towards medical insurance under the GI scheme by individuals and HUF. You can also claim deductions for up to Rs.5000 paid for health checkups.
Section 80EE Deduction:
If you pay interest on a home loan through EMI, you can get an extra deduction under Section 80EE. You can claim up to Rs.1 lakh if it's your first home loan, the loan amount is below Rs.35 lakhs, and the property value is less than Rs.50 lakhs.
Section 80E Deduction:
Individuals can claim this deduction for interest payments on loans taken for higher education. The deduction can be availed for up to 8 years from the start of loan repayment or until the loan is fully paid off, whichever comes first.
Section 80G Deduction:
You can claim deductions for donations to certain funds and charitable institutions, up to 10% of your Gross Taxable Income. The amount you can deduct depends on the fund's exemption status, but you can't claim deductions for cash donations over Rs.2000.
Tax & Process
Step 1: Log In
Go to the official Income Tax e-filing website and click on 'Login'.
Enter your PAN in the User ID section.
Click on ‘Continue’.
Check the security message in the tick-box.
Enter your password and click 'Continue'.
Step 2: Access 'File Income Tax Return'
Click on the 'e-File' tab.
Go to 'Income Tax Returns'.
Choose 'File Income Tax Return'.
Step 3: Select the Correct 'Assessment Year'
Pick 'Assessment Year' as ‘AY 2023-24’.
Select 'Online' as the mode of filing.
Step 4: Choose Your Filing Status
Select your filing status: Individual, HUF, or Others.
Opt for 'Individual' and click 'Continue'.
Step 5: Select the Appropriate ITR Type
Now, choose the correct ITR type based on your financial situation.
There are 7 ITR forms available, so make sure you know which one suits your needs.
Step 6: Specify the Reason for Filing ITR
Select the reason for filing your returns from the options provided:
Step 7: Add Bank Account Details and Review
Provide your bank account details and ensure they are pre-validated.
Review the pre-filled information on the next page for accuracy.
Confirm the summary of your returns and validate the details.
Step 8: Verify Your ITR
The final and crucial step is to verify your return.
Failure to verify your return means it's not filed.
You can e-verify your return using methods like Aadhaar OTP, EVC, Net Banking, or sending a physical copy of ITR-V to CPC, Bengaluru.
Bank and post office savings account passbooks, and PPF account passbooks.
Aadhar Card and PAN card.
Form-16: This is a certificate from your employer that shows your salary details and any TDS (Tax Deducted at Source) deductions.
Interest certificates from banks and the post office.
Form-16A: If TDS is deducted on payments other than salaries (like interest from fixed deposits), especially if it exceeds specified limits.
Form-16B: If you've sold a property, it shows TDS deducted from the payment received from the buyer.
Form-16C: If you're a landlord, it provides details of TDS deducted on rent received from your tenant.
Form 26AS: This is your consolidated annual tax statement, including TDS deductions by your employer, banks, or other organizations, as well as any taxes you've deposited.
Tax-saving investment proofs.
Proof for deductions under sections 80D to 80U, such as health insurance premiums and interest on education loans.
Home loan statement from your bank.
Why is income tax return filing important?
You must file your income tax return if your income exceeds the basic exemption limit or if you meet specific criteria like high foreign travel expenses, significant electricity consumption, or large deposits in bank accounts. Even if you are not required, it is advisable because it serves as proof of income, and is necessary for future loans, credit card applications, visa applications, and more.
What is income tax?
Income tax is a tax imposed by the government on your income. It is a direct tax that individuals, HUFs, or taxpayers pay based on their income or gains in a financial year. Companies also pay income tax. The government uses this tax revenue for various expenses like health, education, infrastructure, and subsidies.
How to pay income tax online?
For salaried individuals, most of the tax is deducted as TDS from their salary. If liable for advance tax, pay 90% before March 31. File your ITR after the financial year ends. The ITR filing window is usually open until July 31 of the relevant assessment year. Late filing incurs a fee.
How to save income tax?
You can save income tax through tax planning. Some common methods include deductions like:
80C: Investments in ELSS, LIC, mutual funds, tuition fees, home loan principal, etc.
80CCC (1b): Contribution to National Pension Schemes.
80D: Medical insurance premiums for self, spouse, children, and dependent parents.
80G: Donations to recognized institutions.
10(13A): House rent allowance exemption.
80E: Deduction for higher education loan.
Section 24: Deduction for home loan interest.
How to get an income tax return copy online?
To get your income tax return copy online:
Visit incometaxindiaefiling.com and log in.
Click on 'View Returns/Forms.'
Select 'Income tax returns' and the relevant assessment year.
Choose the ITR-V acknowledgment number you want to download.
Download the ITR-V PDF file.